Suppose that you decide to start a landscape business. You use an old pickup truck that you've fully paid for. You store the truck and other equipment in your parents' barn, and you store trees and shrubs on their land. Your parents will not charge you for the use of these facilities for the first two years, but beginning in the third year they will charge a reasonable rent. Your mother helps you by answering phone calls and providing customers with information. She doesn't charge you for this service, but she plans on doing it for only your fırst two years in business. Instructions Answer ONE of the following sets of questions: 1. In pricing your services, should you include charges for the truck, the barn, the land, and your mother's services when calculating your product cost? Provide your reasoning. 2. In recording costs in the books, should you include charges for the truck, the barn, the land, and/or your mother's services? Describe the accounting rules that support your answer.

Suppose that you decide to start a landscape business. You use an old pickup truck that you've fully paid for. You store the truck and other equipment in your parents' barn, and you store trees and shrubs on their land. Your parents will not charge you for the use of these facilities for the first two years, but beginning in the third year they will charge a reasonable rent. Your mother helps you by answering phone calls and providing customers with information. She doesn't charge you for this service, but she plans on doing it for only your fırst two years in business. Instructions Answer ONE of the following sets of questions: 1. In pricing your services, should you include charges for the truck, the barn, the land, and your mother's services when calculating your product cost? Provide your reasoning. 2. In recording costs in the books, should you include charges for the truck, the barn, the land, and/or your mother's services? Describe the accounting rules that support your answer.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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